Daily and Weekly Chart View of Apple AAPL

Mar 22, 2009: 3:50 PM CST

Let’s take a quick look at Apple (AAPL)’s weekly chart (including an Elliott Wave count) and a closer look at the Daily Chart’s consolidation rectangle pattern.

Apple (AAPL) Weekly:

I would consider this Elliott Wave count a high-probability count, but it is not the only count available.  It’s also possible that this rectangle is actually part of a fractal Wave 4 of (C), which means the move out of consolidation will be a down-move.  However, for the time being – unless we get a down-move that breaks support at $80 per share – I would consider this a slightly higher probability Wave count.

This count assumes that we made a Wave 5 Peak just as 2008 began and then formed a quick Wave A down into the $120 level before swinging back up in a rapid and strong Wave B (3-wave), before forming a reversal and then heading lower into a 5-wave subdivided C Wave.

A positive momentum divergence has formed and price is respecting a rectangle trend channel.

Apple (AAPL) Daily:

On the Daily Chart, we see how price has created this rectangle consolidation (parallel trendlines) about the $105 and $80/$85 level.  The obvious play would be to wait for a break-out from this consolidation to play for a range expansion move, whether it comes on a break to the upside or the downside.

It would appear currently that price wants to head a little lower as a result of price being at the upper trend-channel resistance line and forming two doji (reversal/indecision) candles in a row last week.  The 3/10 Momentum oscillator is also starting to hook (turn) over at these levels.  Notice the Oscillator has stayed within a respected trend channel as well.

We really can’t use moving averages for analysis in a trading range, though the help show us the mid-point (or ‘value area’) of the range.  Price in a range doesn’t generally respect them for support or resistance (or to set up trades).

I’m also showing that Apple Inc has shown Relative Strength to the S&P 500 Index since 2009 began.  Though prices stayed in a range, they did not decline, unlike the S&P 500 (which is off 15% year-to-date).  Apple is actually up (currently) almost 20% year to date.

Keep watching Apple for a breakout above $105 or a return back to the midpoint or lower channel of the current rectangle trading range.  Apple can’t stay in this range forever!

Corey Rosenbloom
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade
Register (free) for the Afraid to Trade.com Blog to stay updated

5 Comments

5 Responses to “Daily and Weekly Chart View of Apple AAPL”

  1. chartsandcoffee Says:

    Weekly market forecast is up -http://chartsandcoffee.blogspot.com/2009/03/sunday-night-coffee-3222009.html

  2. Vijay Says:

    I disagree.If AAPL doesn’t seem to be in sync with the market and that’s what I think is happening, then,this seems to be wave 4 for AAPL atleast.I understand the indicators are aligning up bullishly,but I doubt AAPL will be able to go beyond 120 before heading down for a wave 5 thus completing a ‘mega’wave A before making its ascent into ‘mega’wave B

  3. Corey Rosenbloom Says:

    Apple is outperforming the market as evidenced by its Relative Strength line.

    It’s certainly possible and maybe even likely that this triangle reflects consolidation/continuation which would imply W4. But it could also be a base-building consolidation which is eating up supply and building a base for a run to a higher level. That would reflect accumulation.

    $120 could serve as resistance, but we’d need to do a reassessment once (and if) price made it up to that level.

    Of course, all bets are off we we swing down to take out $80.

  4. Anonymous Says:

    thanks for doing the aapl analysis. As you said usually a low base heads lower but who knows what is going to happen since big ben is manipulating the market. Munchi

  5. jack Says:

    Hi,

    Would be nice to have a short update on that once, since the situation is more clear now. Many think we’ll see a rally to 125$